Ch-7 Discharge Jan 2012, Looking for Mortgage

[Floridagail]

i'm hard press to believe even many of those with excellent credit are being turned down for mortgages from most all banks presently. of course, there are exceptions to those rules. (my niece rec'd a nice mortgage on a 800k plus house with 50% down and both she and her husband make more than 300k...must be nice, but i'm PROUD of her!!) now, on the other spectrum, i have known of at least 4 people never filed bk, making excellent money, not 300k but debt to income ratio perfect, credit scores in their 800's and all turned down by every bank.

banks simply are not lending much. let's hope something opens up soon, one would certainly think it would with all the inventory held by the banks. but, it's a hard call as when to see when the banks begin to loosen up. i think for now, they are hold tight!

Both my sisters got closings this month. J got FHA 110 k shortsale home sold 2006 for 265k ( with 2005 bankrupty 52,000 yr job. 3% down, they pay closing.
M got USDA loan 62,000 mortgage shortsale sold for 169K in 2005, with 11.00 hr job ( no bkruptcy on her history). No down pmt, they pay closing, she will get her 1000 hold fee back at closing.
This is florida.

[marcer]

I have heard that a Traditional loan after BK takes 2 years, but with a large down payment such as 30% to 50% can get you a loan one day after bankruptcy. But the caveat is that I haven't found a bank that will do that just yet, but I started looking yesterday. I will report back if I find a bank, so other can benifit as well.

There is not, not, not, at this moment any reputable bank which will allow for a mortgage with 3 months seasoning on a chapter 7. Now...it may be possible on a portfolio product or hard money. A portfolio product is a mortgage product which the lender will hold on its books for a period of 3-30 years. These loans are not sold to Fannie Mae, Freddie Mac, or Ginnie Mae.

Hard Money is exactly that HARD Money. Rates are averaged at around 8-12% with 2-6 points in origination. Generally, these loans cannot be used for owner occupied purchases due to usuary and preditory lending prohibitations.

You mentioned you were returning from oversees...are you military? If you were in the military at time of the derog, you may be granted some consideration. if prior military, you may look at VA. I've seen some pretty insane approvals for veterans

[marcer]

Both my sisters got closings this month. J got FHA 110 k shortsale home sold 2006 for 265k ( with 2005 bankrupty 52,000 yr job. 3% down, they pay closing.
M got USDA loan 62,000 mortgage shortsale sold for 169K in 2005, with 11.00 hr job ( no bkruptcy on her history). No down pmt, they pay closing, she will get her 1000 hold fee back at closing.
This is florida.

What section under fha did your sister get with only 3% down? Is she Native American, and if so why was she required to put 3% down instead of 2.25%

[marcer]

i'm hard press to believe even many of those with excellent credit are being turned down for mortgages from most all banks presently. of course, there are exceptions to those rules. (my niece rec'd a nice mortgage on a 800k plus house with 50% down and both she and her husband make more than 300k...must be nice, but i'm PROUD of her!!) now, on the other spectrum, i have known of at least 4 people never filed bk, making excellent money, not 300k but debt to income ratio perfect, credit scores in their 800's and all turned down by every bank.

banks simply are not lending much. let's hope something opens up soon, one would certainly think it would with all the inventory held by the banks. but, it's a hard call as when to see when the banks begin to loosen up. i think for now, they are hold tight!

I don't want to argue the validity of your statement, but an 800 score borrower with perfect debt ratios and income would not be denied unless there was more to it. Banks are not turning away qualified borrowers unless those borrowers do not meet today's qualified borrower profile. Keep in mind,,,we are not lending on yesterday's standards. Just because a borrower has 800 scores and 26/38 debt ratios doesn't mean you can just walk in and out of your local bank with a mortgage. Credit depth and history are important. I know 21 year olds with authorized user status on credit accounts who have 800 credit scores. These types do not meet guideline. Less than 2 years job history or long gaps of employment does not meet guidleines. Assets which can not be verified...and so on. There are many reasons why these borrowers cannot purchase. But it's not because the banks do not want to lend money

[Logan]

I don't want to argue the validity of your statement, but an 800 score borrower with perfect debt ratios and income would not be denied unless there was more to it. Banks are not turning away qualified borrowers unless those borrowers do not meet today's qualified borrower profile. Keep in mind,,,we are not lending on yesterday's standards. Just because a borrower has 800 scores and 26/38 debt ratios doesn't mean you can just walk in and out of your local bank with a mortgage. Credit depth and history are important. I know 21 year olds with authorized user status on credit accounts who have 800 credit scores. These types do not meet guideline. Less than 2 years job history or long gaps of employment does not meet guidleines. Assets which can not be verified...and so on. There are many reasons why these borrowers cannot purchase. But it's not because the banks do not want to lend money

Marcer, you're absolutely correct. Banks are looking for reasons not to lend but if you have a good loan officer and the credit, income and assets then you won't have a problem getting a loan. Think of getting a loan like a job interview, you offer all the good things and weed out the bad and if you have a blemish you better do a good job explaining it or you may not get hired. Getting a loan is the same way.

Logan

[marcer]

Marcer, you're absolutely correct. Banks are looking for reasons not to lend but if you have a good loan officer and the credit, income and assets then you won't have a problem getting a loan. Think of getting a loan like a job interview, you offer all the good things and weed out the bad and if you have a blemish you better do a good job explaining it or you may not get hired. Getting a loan is the same way.

Logan

I love the analogy Logan. If you don't mind, I'm going to use it in the future :-)

[marcer]

Absolute scrutiny of every single thing. They questioned me up one side and down the other because I made some deposits other than my checks from work via direct deposit. They wanted to know what I was doing to earn the money. Many other examples like this.....the thing they seem to have cared about the least was the credit report. Now I am on hold because an old second mortgage that was supposed to be cancelled when I paid off my previous residence after Katrina was never removed. Now they are telling me that I may have to wait three years (so until this November) because of said problem unless I can get it resolved. They want to treat it like a foreclosure......freaking insanity. These banks are nit picking every single thing right now and with FHA you can double that nit picking.

I'm sorry to hear your experiencing so many challenges. With that being said, it's not you. It's not your credit score nor your history. It is the way of lending today based on factors such as recent legislation and the GSE's.

ALL...not just a little, BUT ALL ASSETS NEED TO BE DOCUMENTED Lenders need to verify irregular deposits to determine the source of said deposits, and if it unusual, it must disregarded. Any asset account used for down payment, closing cost, or paying off debt to qualify, must be SOURCED and SEASONED. The lender needs to determine those assets were: 1. Legally gained. 2. Did not come from a party associated with the transaction i.e. Realtor or seller, or 3. Was not provided by a person outside the transaction such as friend or family member to circumvent asset requirement.

EVERYTHING MUST BE DOCUMENTED All guidelines, whether FHA, RD, VA, Non Agency, or Agency, require the minimum requirements

1. Proof of income------documented by minimum most recent W2 and YTD paystub. S/E, bonus or Commision income requires 2 years tax returns. Need to document previous earnings and establish a history

2. Most recent 30-60 days banks statements or other asset type with ALL pages. If 6 pages, but page 6 is blank, still provide. All deposits, transfers and NSF's must be detailed. If transfers are from another account. Additional account documentation will be needed.

3. Two year rental history must be included with most recent 12 months pay history documentd by VOR or cancelled checks

4. Any less than the information detailed above could potentially mean the loan would be an un-saleable loan, and the lender would be required to buy back the loan. Even worse, the lender could potentially face sanctions, fines and penalties, and lose the ability to offer certain programs such as FHA, VA, or RD...I also forgot...possible criminal charges.

5. This extends to all borrower. Doesn't matter if you are a 500 or 800 credit score customer. The only difference is the amount beyond the minimum.

6. As for your second mortgage being paid off or forgiven, generally it is from date of sale, but some lenders will take reconveyance date. If the original lien holder took an extra year to have lien released, you may have to wait the three years from that date. Now if you sold the property...not through a short, than you should not have it treated as a short to possible foreclosure.

A quick search on google regarding basic loan requirements will most certainly support everything stated. Just be careful where and from whom you get your information. Is it backed by facts or is it emotionally based.

And yes, I am a lender. I've been one for 17 years...I do this every day

[Floridagail]

Both my sisters got closings this month. J got FHA 110 k shortsale home sold 2006 for 265k ( with 2005 bankrupty 52,000 yr job. 3% down, they pay closing.
M got USDA loan 62,000 mortgage shortsale sold for 169K in 2005, with 11.00 hr job ( no bkruptcy on her history). No down pmt, they pay closing, she will get her 1000 hold fee back at closing.
This is florida.

Just wanted update, neither closing happen yet. M shortsale she is buying came back low on appraisal, so
do not know when it will happen , hard to believe a house that sold for 169 is now appraising at 60k. The bank has got to decide to sell it for 60K now, plus M is fighting over the 3000 Neg fee.

J seller bank has finally accepted her offer, but now something she paid off in 2000 is showing CB as part of her bankruptcy claiming she filed in 2009, ( she filed in 2003). Her appraisal has not come back yet.

[Floridagail]

What section under fha did your sister get with only 3% down? Is she Native American, and if so why was she required to put 3% down instead of 2.25%

Not sure, but she could be confused as she is totally in dark over this mortgage deal. She has a 760 credit score, does it matter.

[Logan]

I love the analogy Logan. If you don't mind, I'm going to use it in the future :-)

Go ahead Marcer. I used to be a loan officer but after a few companies went under on me I finally left for another job. I am thinking about jumping back in though.